When someone commits credit fraud, or credit card fraud, they are using someone else's credit card or credit card number to obtain money or merchandise fraudulently. There are many ways to commit credit fraud, and the perpetrator does not necessarily have to be using a stolen credit card to be committing the act of fraud. When credit fraud is committed using a stolen card, it is also considered to be a form of identity theft. Acts of credit fraud have costs that easily reach billions of dollars every year worldwide.
In its most simple form, credit fraud is simply the act of using someone else’s credit card or credit card number in order to obtain goods or money. Since the beginning of credit cards, there have been thieves whose sole purpose is to steal them for their own gain. The issue of credit fraud became more complicated with the ability to purchase items or services without needing the physical credit card to buy them, for instance by using a credit card number to make a purchase over the telephone. Of course, things are far more complicated now since the Internet has provided perpetrators of credit fraud with many new and different ways to commit their crimes.
Making matters even more difficult, credit thieves can be quite difficult to catch and prosecute if they are adept at their fraudulent practices. A stolen credit card number can be left unused for months before the thief decides to begin stealing with it, and once they do, the cardholder may not know that it is being used until she receives a billing statement in the mail. Once a cardholder becomes aware of credit fraud that is being perpetrated against her, sheare usually able to cancel their card rather quickly, and most credit card companies have policies in place to protect their cardholders from fraud. Credit card companies also have complex security measures in place that alert them when a card is possibly being used for fraud, and they will often block suspicious purchases until the actual cardholder verifies them.
Another type of credit fraud is when the thief will use information to open up a credit card account in someone else’s name. The thief will gather as much information as possible about the victim before using that information to take over their account. This can be especially damaging since the thief will be able to forge documents, perhaps even with his own picture, which will allow them free rein over the victim’s finances. This can take even longer for the victim to find out that his identity has been stolen, and it can be much more difficult to correct though their financial institutions.
Another notable type of credit fraud is skimming. In this process, a dishonest merchant will steal credit information in one of several different ways during otherwise legitimate transactions. In some cases, fake credit card readers can be put over real ones for the purpose of stealing the information directly from the card. There are many ways to protect oneself from credit fraud, and the main one is to be constantly alert whenever doing any type of credit card transaction.